Because the various
AAA bonds traded at decidedly different interest rates.
Not exact matches
Aside from
AAA securities, most asset backed
bonds never
trade.
Meanwhile
bonds such as cusip 38122NYM8 have outperformed the MMD
AAA by as much as 50bps over the same period in secondary
trading.
AIG had a
AAA credit rating, but its
bonds frequently
traded cheap to other
AAA bonds because of the opacity of the financials of the firm (and among some
bond managers, a growing sense that AIG had too much debt).
In addition to small cap and big cap value funds I also lightened up on GM & GMAC junk
bonds and added to my investment grade
bonds by buying
AAA and AA exchange
traded debt issues that were mainly utilities and financial companies.